Austerity is the new watchword in a Europe that’s encumbered with massive public debt. Governments are now turning to “green” bonds to cover the cost of transitioning Europe to clean sources of energy.

Renowned NASA scientist James Hansen wrote that climate change is the “most urgent fight of our lives.” But action won’t come without a cost: Hansen estimates that it will cost nearly US$12 trillion to curb carbon emissions worldwide.

European leaders are planning to spend €2.9 trillion ($3.93 trillion) over the next ten years toward the goal of reducing carbon pollution. The bond proposal will finance cutting greenhouse gas emissions below 1990 levels.

Participating banks would be pooling the debt to avoid spoiling key financial ratios. Financial consulting firm Accenture told the New York Times, “Banks could provide primary debt, securitize it into ‘green bonds’ and place the securities on the mainstream public markets with minimal impact on their balance sheets.”

Last week, a meeting of European Union leaders in Brussels culminated in an agreement to involve the European Commission in contact negotiations with energy suppliers.

EU leaders also agreed invest a trillion-euros in public financing that would built out a modern energy infrastructure, linking regional power grids and gas pipelines as well as increasing sources of renewable and nuclear power.